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Music Video Distribution Unlikely To Change Much As Vevo Succumbs To YouTube

1After a long and doomed battle, Vevo has finally thrown up the white flag, shuttering its site and ditching its mobile app, however, the fateful end of this attempt by record labels to compete with YouTube will likely have little impact on music distribution as we know it.

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Guest post by Bobby Owsinski of Music 3.0

I wonder how many times YouTube viewers watched an “official” music video from their favorite artist and saw the Vevo logo on the video or in the song’s description. I wonder how many actually thought to themselves, “What the heck is a Vevo?” That, my friends, was the main problem of the major record labels’ ill-fated attempt to compete with YouTube. Now after nine years, the majors have finally given in and closed the Vevo site and mobile apps in a complete capitulation to the video distribution giant.

Vevo (which stands for “video evolution”) was the major’s attempt at increasing advertising revenue from their artist’s videos as compared to what YouTube was paying. In theory it was a winner. We put our videos on our own service, then use our own dedicated sales force to sell high-end advertisers who are afraid of music videos on YouTube, thereby keeping all the revenue and avoiding the dreaded YouTube royalty split.

The big problem was getting viewers to the Vevo site, since in actuality, music fans didn’t much care if they were getting the official artist video or an uploaded version by a user on YouTube. YouTube had all the traffic and those numbers dramatically increased over time. Vevo entered into a distribution deal with YouTube for its own dedicated channel to get at least some of those eyeballs on their videos (as well as some of the revenue), which lead to a dilemma. If fans could access the same video on YouTube as they could on Vevo, then why bother to ever leave YouTube?

Which leads to the announcement nine years later that Vevo has had enough and has signed a new distribution deal with YouTube that gives its salesforce total access to the Vevo product. Although it’s only ending its website and mobile app and not totally shuttering, it’s probably only a matter of time until that happens too. After all, why spend money on an entity that’s not giving you that much value?

2Vevo is reported to have generated around $650 million in revenue in 2017 based on around 300 billion views, enough for the company to break even. It’s said that most of that income came as a result of YouTube ad dollars, which again makes the point that a new syndication deal with YouTube will ultimately be more profitable than having Vevo trying to duplicate the effort.

In retrospect, could the major labels and Vevo have done anything different to ensure success? Probably not, since the official music videos and the user generated ones didn’t display enough of a difference to make the official videos worth an exclusive on the Vevo platform, which the company then could have exploited. In fact, in some cases the user generated videos even sound better than the official ones, which is a huge defeat right there. Even with a better marketing campaign to explain what the platform was and the benefits it offered (something that users never grasped even to this day) wouldn’t have worked. YouTube is an established brand and Vevo never even ventured near the same ballpark.

Ultimately Vevo will be another example of the adage “Beware of giants with deep pockets,” as even well-funded successful companies have trouble going up against a tech monster like Google.

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